Key Insights
Luxury vacation rental occupancy rose from 49.1% to 55.9% between 2019 and 2023.
Small Atlantic coastal markets saw an 8% increase in bookings compared to last year.
There are still lucrative short-term rental opportunities under $500,000.
The short-term rental market is thriving. According to AirDNA, luxury vacation rentals have seen a significant rise in occupancy and revenue, reaching $64 billion in 2023. Despite lower occupancy rates compared to long-term rentals, vacation rentals often serve as medium-term rentals in the off-season.
Short-Term Rental Markets & East Coast Hot Spots
Data from Skift and AirDNA indicates that East Coast beaches are popular this summer, with a 7.7% increase in booked nights. Myrtle Beach, South Carolina, leads the trend, replacing New York in top vacation spots.
Investors looking for properties with high-revenue potential under $500,000 should consider these locations based on desirability, income potential, management costs, and appreciation.
Top Investment Locations
Columbus, Georgia
Home Value: $161,000
Occupancy: 60%
Daily Rate: $178
Revenue: $29,000
Columbus, known for its whitewater rafting on the Chattahoochee River, offers a great investment opportunity at $161,000. It tops AirDNA’s Best Places to Invest in 2024.
Oneonta, New York
Home Value: $211,000
Occupancy: 60%
Daily Rate: $356
Revenue: $27,000
Oneonta is an affordable gem in upstate New York with high daily rates. Its proximity to Robert V. Riddell State Park makes it attractive year-round, including as a winter retreat.
Fairbanks, Alaska
Home Value: $239,000
Occupancy: 65%
Daily Rate: $225
Revenue: $32,000
Fairbanks offers great summer rental income, with a typical home price of $239,000. Its popularity as a vacation spot has grown, boosting revenue potential.
Fennville, Michigan
Home Value: $309,000
Occupancy: 56%
Daily Rate: $595
Revenue: $63,000
With a landscape of orchards and vineyards, Fennville offers high annual revenue. An investor could use an FHA loan and low initial investment to secure a property here.
Ashford, Washington
Home Value: $323,000
Occupancy: 67%
Daily Rate: $242
Revenue: $44,000
Ashford, near Mount Rainier National Park, is an affordable and scenic STR haven. Regulations ensure a cozy, small-scale rental experience.
Beaufort, South Carolina
Home Value: $347,000
Occupancy: 61%
Daily Rate: $234
Revenue: $40,000
Beaufort’s Southern charm and historic district make it a desirable investment. Its laid-back atmosphere and waterfront park attract many visitors.
Kitty Hawk, North Carolina
Home Value: $350,000
Occupancy: 64%
Daily Rate: $434
Revenue: $38,800
Kitty Hawk, in the Outer Banks, offers strong investment metrics. Its attractions, including lighthouses and wild horses, draw tourists year-round.
Logan, Ohio
Home Value: $233,000
Occupancy: 57%
Daily Rate: $343
Revenue: $57,000
Logan, in the Hocking Hills region, is a rural retreat with numerous summer activities. Its parks, rivers, and caves make it a popular tourist destination.
Mount Pocono, Pennsylvania
Home Value: $439,000
Occupancy: 47%
Daily Rate: $312
Revenue: $45,300
Close to major cities, the Poconos have long been a favorite for their natural beauty. The area has seen increased demand recently.
Owning a seasonal short-term rental with a strong summer clientele can sustain year-round income. Peak holidays like Memorial Day, Independence Day, and Labor Day are particularly lucrative. To optimize profits, consider hiring a good management company and leveraging tax benefits for rental properties, including expense deductions.
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